The fund, established in 1974, has more than 99,000 members and is the largest of its kind in the country, according to PORAC's website.

PORAC made its decision based on a certified fraud examiner's report, which included allegations of double and triple billing, and bills for travel that never happened.

"Given the extended period of time over which these widespread acts over billing have occurred," the board wrote, "numerous experts have estimated the potential damages to be quite substantial."

The board also wrote that a "continued analysis and investigation to more precisely quantify the losses" to the Legal Defense Fund is being undertaken.

The lawsuit filed by Costa Mesa Mayor Jim Righeimer, his wife and Mayor Pro Tem Steve Mensinger alleges that Lackie, Dammeier, McGill & Ethir — infamous for its "playbook" of election-year tactics that include "chastising" City Council members — harassed them for political gain. The playbook, once posted on the law firm's website, PoliceAttorney.com, has since been taken down.

The Costa Mesa Police Officers' Assn. and Chris Lanzillo, a private investigator, are also named as defendants in the civil-action lawsuit filed in August.